Janus SG Market Consensus Index

Transcription

1 Unlock growth potential through the wisdom of the crowd Janus SG Market Consensus Index This material is provided by Athene Annuity and Life Company, headquartered in West Des Moines, Iowa, which issues the annuities described herein. (02/18)

2 Gain the wisdom of the crowd. Key market trends have become increasingly difficult to predict. In today's environment, asking many experts is often wiser than relying on one voice. That s the idea behind the Janus SG Market Consensus Index. It strives to outperform market benchmarks by capturing the wisdom of the crowd. A performance engine gathers data from hundreds of analysts. Their combined price targets and past dividends help determine the U.S. stocks with the most growth potential. Pursuing growth potential through a three-step systematic process The Janus SG Market Consensus Index uses a system of three rules-based strategies to determine the composition of the index and pursue performance objectives. A rules-based approach is data-driven and does not rely on emotion or hunches. Market Consensus Strategy A market consensus filter designed by Janus Henderson that embeds a low volatility 1 fi l t e r. Volatility Control Mechanism The Index aims to stabilize itself during periods of high market volatility 1 by reducing its exposure to the Market Consensus Strategy. Performance Control Mechanism The Index includes a performance control mechanism which improves the participation rate 2 applied within the indexed annuity interest crediting strategies. However, the Index can only grow up to a given limit every month. 2 1 Volatility is the amount of price variation in an asset or security. High volatility means the price moves up and down in wide ranges over a period of time. Low volatility means that the price does not change as dramatically, but rather changes at a more gradual pace. 2 The performance control mechanism allows investors to benefit from a higher participation in the potential performance of the index through investment products offered by issuers. For example, if an investment product linked to the Janus SG Market Consensus Index offered investors 100% participation to the upside potential of the index, then a similar product linked to a similar index but without the performance control mechanism may offer investors a lower participation rate to the upside potential of the index (e.g. 90% participation). However, the Index can only grow up to a given limit every month.

3 Janus SG Market Consensus Index The Janus SG Market Consensus Index is a consensus-driven index of the largest U.S. companies based on market capitalization. Its Market Consensus Strategy strives to select stocks with the highest potential return and lowest potential risk. Volatility Control and Performance Control mechanisms seek to stabilize and improve the participation rate applied within the indexed annuity interest crediting strategies offered by Athene. Market Consensus Strategy Select the largest U.S. stocks with the highest potential return and the lowest potential risk. 1 1 SELECT 250 large-cap US companies Every quarter, the Market Consensus Strategy identifies the 500 largest market capitalizations in the United States. From these, it selects the 250 stocks with the lowest three-month volatility. 2 DETERMINE the Market Consensus Score for each stock Every month, the strategy calculates the Potential Return of each of the 250 selected stocks based on: The average of the 12-month price targets of a panel of analysts The dividends paid over the previous 12 months The market price of the stock The strategy then divides the Potential Return of each stock by its historical 3-month volatility to determine its Market Consensus Score. Negative scores are set to zero. 3 ALLOCATE each stock to the index by weight The strategy computes the weight of each stock by dividing its Market Consensus Score by the sum of the scores of all 250 stocks. Generally, the stock with the highest potential return and lowest historical volatility would receive the highest weight. 1 Changes in the value of the underlying stocks composing the Market Consensus Strategy may offset each other and thus act to reduce the level of the Index below what it would have achieved if the poorer performing stocks were not included. The appropriate Athene Fixed Indexed Annuity Product Brochure, Index Strategy Inserts and Certificate of Disclosure must be provided with this brochure. 3

4 Volatility and Performance Control Mechanisms Help provide stability in the underlying index and improve the Participation Rate in annuity interest crediting strategies by limiting the monthly performance in the index. Volatility Control Mechanism Generally speaking, the greater a stock s volatility, the more risk it presents. The Volatility Control Mechanism aims to stabilize returns to better manage risk. On a daily basis, it responds to short-term volatility by adjusting exposure to the Market Consensus Strategy. The volatility target of the Volatility Control Mechanism is set at 20%. When volatility falls below the target, exposure to the Market Consensus Strategy increases. When volatility rises above the target, exposure decreases. Through the Volatility Control Mechanism, the fluctuations of the Market Consensus Strategy may be amplified upward or downward. In order to effectively reach the 20% volatility target, a second exposure adjustment factor is used that may modify the effective exposure to the Market Consensus Strategy. HIGH VOLATILITY (greater than 20%) LOW VOLATILITY (less than 20%) Exposure reduced Exposure increased Less than 100% exposure to the Market Consensus Strategy Up to 400% exposure to the Market Consensus Strategy Market Consensus strategy Market Consensus strategy exposure 4 Market Consensus strategy Market Consensus strategy exposure

5 Performance Control Mechanism Returns are an important measure of index performance. But when you re considering interest crediting strategies in a fixed indexed annuity, the rate of participation in any positive index return is also critical. The Janus SG Market Consensus Index uses a Performance Control Mechanism to balance these two imperatives. 1 The strategy limits the potential positive performance of the Volatility Controlled Strategy to 4% per month with no limit to downside returns. This allows for a higher participation rate than might otherwise be possible. A higher rate increases the amount of any interest credited to your Athene annuity. Hypothetical Illustration of the Performance Control Mechanism 2 Value of the Volatility Controlled Strategy Month 1 Month 2 Month 3 This month, growth in the Volatility Controlled Strategy exceeds 4% and the Performance Control mechanism kicks in. The ending value for the previous month becomes the beginning value for the next one. The 4% limit is applied to the Janus SG Market Consensus Index during each calendar month and is reset monthly. Volatility Controlled Strategy Janus SG Market Consensus Index 1 The Index features a performance control mechanism that limits its growth potential within any given month. Consumers may forego part of the growth of the Index if it rises beyond this limit. 2 Certain extraordinary and disruption events may impact the calculation of the Index. 5

6 Capturing the "wisdom of the crowd" unlock return potential Hypothetical Historical Simulation & Past Performance Janus SG Market Consensus Index Janus SG Market Consensus Index (historical hypothetical simulation) S&P 500 index (SPX) Hypothetical Assumptions: $100 invested in the Janus SG Market Consensus Index and the S&P 500 Price Index. Source: Societe Generale from March 10, 2003 to December 31, All results are calculated for periods ending as the date above. The Janus SG Market Consensus Index was launched on May 16, This backtested, hypothetical, historical data has inherent limitations and is provided for illustrative purposes only. It should not be read as a guarantee or an indication of the future performance of the Janus SG Market Consensus Index. Results during these periods may have been different (perhaps considerably) had the strategy actually been in existence. Unlike actual performance records, hypothetical or simulated performances, returns or scenarios may not necessarily reflect certain market factors such as liquidity constraints. THE FIGURES RELATING TO PAST PERFORMANCES AND/OR SIMULATED PERFORMANCES REFER TO PAST PERIODS AND ARE NOT A RELIABLE INDICATOR OF FUTURE RESULTS. PLEASE REFER TO CAUTIONARY STATEMENTS REGARDING HYPOTHETICAL SIMULATIONS UNDER IMPORTANT LEGAL NOTICE AT THE END OF THE DOCUMENT. The foregoing performance information does not include any relevant costs and fees associated with any Athene annuity or any other financial product linked to the Janus SG Market Consensus Index or S&P 500 Price Index. For more information on any Athene annuity products and performance with the Janus SG Market Consensus Index, ask your financial professional for an illustration. 6

7 A Partnership of Expertise The Janus SG Market Consensus Index is sponsored by Societe Generale and developed in partnership with Janus Henderson. It is used exclusively in fixed indexed annuities from Athene Annuity and Life Company. Janus Henderson exists to help clients achieve their long-term financial goals. Formed in 2017 from the merger between Janus Capital Group and Henderson Group, Janus Henderson is committed to adding value through active management. Active is more than an investment approach for Janus Henderson it is the way they translate ideas into action, how they communicate their views and the partnerships they build in order to create the best outcomes for clients. Societe Generale is one of the largest European financial services groups. Based on a diversified universal banking model, the Group strives to combine financial solidity with a strategy of sustainable growth. Societe Generale s teams offer services to individual, corporate and institutional customers and are particularly renowned for their global expertise in investment banking, financing and global markets. A subsidiary of Athene Holding Ltd. (NYSE: ATH), a leading retirement services company, Athene Annuity and Life Company specializes in providing individuals and institutions with innovative financial solutions for their retirement savings needs. Athene leverages over 100 years of experience in the insurance and annuity business in its relentless approach to serving policyholders. For additional information on the index, please visit The Janus SG Market Consensus Index (the Janus SG MC Index ) is the exclusive property of Société Générale (Société Générale, together with its affiliates, SG ). SG has contracted with Solactive AG ( Solactive ) to maintain and calculate the Janus SG MC Index. Société Générale, SG, "Janus", "Janus Henderson Investors", Janus SG Market Consensus Index and Janus SG MC Index (collectively, the SG Marks ) are trademarks or service marks of SG or have been licensed for use by SG from Janus Index & Calculation Services LLC and its affiliates ( Janus ). SG has licensed use of the SG Marks to Athene Annuity and Life Company ( Athene ) and sub-licensed the use of certain Janus marks (the Janus Marks ) for use in a fixed indexed annuity offered by Athene (the Fixed Indexed Annuity ). SG s sole contractual relationship with Athene is to license the Janus SG MC Index and the SG Marks and sub-license the Janus Marks to Athene. None of SG, Solactive, Janus or other third party licensor (collectively, the Index Parties ) to SG is acting, or has been authorized to act, as an agent of Athene or has in any way sponsored, promoted, solicited, negotiated, endorsed, offered, sold, issued, supported, structured or priced any Fixed Indexed Annuity or provided investment advice to Athene. No Index Party has passed on the legality or suitability of, or the accuracy or adequacy of the descriptions and disclosures relating to, the Fixed Indexed Annuity, including those disclosures with respect to the Janus SG MC Index. The Index Parties make no representation whatsoever, whether express or implied, as to the advisability of purchasing, selling or holding any product linked to the Janus SG MC Index, including the Fixed Indexed Annuity, or the ability of the Janus SG MC Index to meet its stated objectives, including meeting its target volatility. The Index Parties have no obligation to, and will not, take the needs of Athene or any annuitant into consideration in determining, composing or calculating the Janus SG MC Index. The selection of the Janus SG MC Index as a crediting option under a Fixed Indexed Annuity does not obligate Athene or SG to invest annuity payments in the components of the Janus SG MC Index. 7

8 THE INDEX PARTIES MAKE NO REPRESENTATION OR WARRANTY WHATSOEVER, WHETHER EXPRESS OR IMPLIED, AND HEREBY EXPRESSLY DISCLAIM ALL WARRANTIES (INCLUDING, WITHOUT LIMITATION, THOSE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE), WITH RESPECT TO THE JANUS SG MC INDEX OR ANY DATA INCLUDED THEREIN OR RELATING THERETO, AND IN PARTICULAR DISCLAIM ANY GUARANTEE OR WARRANTY EITHER AS TO THE QUALITY, ACCURACY, TIMELINESS AND/OR COMPLETENESS OF THE JANUS SG MC INDEX OR ANY DATA INCLUDED THEREIN, THE RESULTS OBTAINED FROM THE USE OF THE JANUS SG MC INDEX AND/OR THE COMPOSITION OF THE JANUS SG MC INDEX AT ANY PARTICULAR TIME ON ANY PARTICULAR DATE OR OTHERWISE. THE INDEX PARTIES SHALL NOT BE LIABLE (WHETHER IN NEGLIGENCE OR OTHERWISE) TO ANY PERSON FOR ANY ERROR OR OMISSION IN THE JANUS SG MC INDEX OR IN THE CALCULATION OF THE JANUS SG MC INDEX, AND THE INDEX PARTIES ARE UNDER NO OBLIGATION TO ADVISE ANY PERSON OF ANY ERROR THEREIN, OR FOR ANY INTERRUPTION IN THE CALCULATION OF THE JANUS SG MC INDEX. NO INDEX PARTY SHALL HAVE ANY LIABILITY TO ANY PARTY FOR ANY ACT OR FAILURE TO ACT BY THE INDEX PARTIES IN CONNECTION WITH THE DETERMINATION, ADJUSTMENT OR MAINTENANCE OF THE JANUS SG MC INDEX. WITHOUT LIMITING THE FOREGOING, IN NO EVENT SHALL AN INDEX PARTY HAVE ANY LIABILITY FOR ANY DIRECT DAMAGES, LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. No Index party is a fiduciary or agent of any purchaser, seller or holder of a Fixed Indexed Annuity. None of SG, Solactive, Janus, or any third party licensor shall have any liability with respect to the Fixed Indexed Annuity in which an interest crediting option is based on the Janus SG MC Index, nor for any loss relating to the Fixed Indexed Annuity, whether arising directly or indirectly from the use of the Janus SG MC Index, its methodology, any SG Mark, Janus Mark or otherwise. Obligations to make payments under the Fixed Indexed Annuities are solely the obligation of Athene. In calculating the performance of the Janus SG MC Index, SG deducts a maintenance fee of 0.50% per annum, calculated on a daily basis. This fee will reduce the potential positive change in the Janus SG MC Index and increase the potential negative change in the Janus SG MC Index. While the volatility control applied by SG may result in less fluctuation in rates of return as compared to indices without volatility controls, it may also reduce the overall rate of return as compared to products not subject to volatility controls. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's ( S&P ) or its third-party licensors. Neither S&P nor its third-party licensors makes any representation or warranty, express or implied, to the owners of the product or any member of the public regarding the advisability of investing in securities generally or in the product particularly or the ability of the S&P 500 to track general stock market performance. S&P's and its third-party licensor s only relationship to licensee is the licensing of certain trademarks and trade names of S&P and the third-party licensors and of the S&P 500 which is determined, composed and calculated by S&P or its third-party licensors without regard to licensee or product. S&P and its thirdparty licensors have no obligation to take the needs of licensee or the owners of the product into consideration in determining, composing or calculating the S&P 500. Neither S&P nor its third-party licensors is responsible for and has not participated in the determination of the prices and amount of the product or the timing of the issuance or sale of the product or in the determination or calculation of the equation by which the product is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the product. NEITHER S&P, ITS AFFILIATES NOR THEIR THIRD-PARTY LICENSORS GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE S&P 500 OR ANY DATA INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P, ITS AFFILIATES AND THEIR THIRD-PARTY LICENSORS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS OR DELAYS THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MARKS, THE S&P 500 OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P, ITS AFFILIATES OR THEIR THIRD-PARTY LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE. This material is provided by Athene Annuity and Life Company, headquartered in West Des Moines, Iowa, which issues annuities. This material is a general description intended for general public use. Athene Annuity and Life Company is not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read as investment advice. Please reach out to your financial professional if you have any questions about this product or its features. The term financial professional is not intended to imply engagement in an advisory business with compensation unrelated to sales. Financial professionals will be paid a commission on the sale of an Athene annuity. Prior to purchasing a fixed-indexed annuity with this strategy option, consumers should seek independent financial, tax, accounting and legal advice. ATHENE ANNUITIES ARE PRODUCTS OF THE INSURANCE INDUSTRY AND NOT GUARANTEED BY ANY BANK NOR INSURED BY FDIC OR NCUA/NCUSIF. MAY LOSE VALUE. NO BANK/CREDIT UNION GUARANTEE. NOT A DEPOSIT. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. MAY ONLY BE OFFERED BY A LICENSED INSURANCE AGENT.